Case study - Bosna RE

bosnare.ba

Case study - Bosna RE

g

ERC Frankona

Case Study

Canned Fruit Company


g

ERC Frankona

Canned Fruit Company

This account has two locations. Location A is a fruit processing facility. The freshly picked

ripe fruit is stored in a cold-storage warehouse that is two metres detached from the

processing building. Location B is a warehouse situated on the other side of the village and

containing the stock of canned and cartoned fruit. The following sketches show the layout of

the buildings.

Plant A

BOILER

HOUSE

Brick

OFFICE

CONCR.

OFFICE

FRUIT PREPARA-

TION & CANNING

STERILISATION

FRUIT

PEELING

ST O RAGE

CORRUGATED PLASTIC CANOPY

METAL DECK ROOF

(NON COMBUSTIBLE) ON STEEL

OFFICE

Brick PPRODUCTION Brick

CONCRETE FOUNDATION

COLD STORAGE

WAREHOUSE

FOR

FRESH RIPE

FRUIT

POLYURET H ANE INSULATED

METAL ON STEEL

WARE-

HOUSE

LOADING DOCK

ERC Frankona

2


g

ERC Frankona

Plant B

WAREHOUSE

METAL SHEET ON LIGHT STEEL

CONCRETE FOUNDATION

At the end of the season, the warehouse is full and the stock is sold during the year, as the

Sales table here below shows:

Sales in 1,000 kg 1995 1996 1997 1998 1999

1 st Quarter 2,000 2,000 2,500 2,000 2,000

2 nd Quarter 1,000 1,000 1,500 1,000 1,000

3 rd Quarter 10,000 10,000 13,000 11,000 10,000

4 th Quarter 5,000 5,000 6,000 4,000 5,000

Total 18,000 18,000 23,000 18,000 18,000

The company is insured under a named perils property coverage for the two locations. It

wishes a three month BI coverage. Deductibles are USD 20,000 for property and one day for

BI. Anniversary is 1 January.

ERC Frankona

3


g

ERC Frankona

Additional information can be found in the two following tables:

Declared values for property in million USD

Plant A Plant B

Buildings 3 2

Machinery 22 0.1

Stock 0 20

Total 25 22.1

Sales price in USD/ kg

USD/kg

Raw Material 0,5

Utilities 0.45

Salaries 0.5

Administration 0.2

Production costs 0.4

Taxes 0.33

Profit 0.15

Total 2.53

Questions

1. Are the property values adequate?

2. What is the sum insured for PD ?

3. What is the sum insured for BI?

4. What is the EML for plant B?

5. Are the deductibles acceptable?

6. Was Canned Fruit underinsured in 1997?

7. Could you help the insured avoid underinsurance in this case?

ERC Frankona

4

More magazines by this user
Similar magazines